Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
- --------------------------------------------------------------------------------
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 18, 1998
IRON MOUNTAIN INCORPORATED
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
<TABLE>
<CAPTION>
<S> <C>
0-27584 04-3107342
(Commission file number) (I.R.S. Employer Identification No.)
</TABLE>
745 Atlantic Avenue, Boston, MA 02111
(Address of Principal Executive Offices, Including Zip Code)
(617) 535-4766
(Registrant's Telephone Number, Including Area Code)
<PAGE>
Item 5. Other Events
SELECTED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
(In thousands, except per share data)
The following selected consolidated statements of operations and balance
sheet data of Iron Mountain Incorporated (the "Company") as of and for each of
the years ended December 31, 1993, 1994, 1995, 1996 and 1997 have been derived
from the Company's audited consolidated financial statements and have been
restated to reflect a three-for-two stock split effected in the form of a
dividend on the Company's Common Stock which was approved by the Company's Board
of Directors on June 30, 1998. Shares of the Common Stock were issued on July
31, 1998 to all stockholders of record as of the close of business on July 17,
1998. The selected consolidated financial and operating information set forth
below should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and with Iron Mountain's
Consolidated Financial Statements and the Notes thereto included in the
Company's Annual Reports on Form 10-K for the years ended December 31, 1997 and
1996.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------
1993 1994 1995 1996 1997
------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Consolidated Statements of Operations Data:
Revenues:
Storage ..................................................... $ 48,892 $ 54,098 $ 64,165 $ 85,826 $ 125,968
Service and Storage Material Sales .......................... 32,781 33,520 40,271 52,892 82,797
--------- -------- -------- -------- ---------
Total Revenues ............................................ 81,673 87,618 104,436 138,718 208,765
Operating Expenses:
Cost of Sales (Excluding Depreciation) ...................... 43,054 45,880 52,277 70,747 106,879
Selling, General and Administrative ......................... 19,971 20,853 26,035 34,342 51,668
Depreciation and Amortization ............................... 6,789 8,690 12,341 16,936 27,107
--------- -------- -------- -------- ---------
Total Operating Expenses .................................. 69,814 75,423 90,653 122,025 185,654
--------- -------- -------- -------- ---------
Operating Income ............................................. 11,859 12,195 13,783 16,693 23,111
Interest Expense, Net ........................................ 8,203 8,954 11,838 14,901 27,712
--------- -------- -------- -------- ---------
Income (Loss) Before Provision (Benefit) for Income Taxes .... 3,656 3,241 1,945 1,792 (4,601)
Provision (Benefit) for Income Taxes ......................... 2,088 1,957 1,697 1,435 (80)
--------- -------- -------- -------- ---------
Income (Loss) Before Extraordinary Charge .................... 1,568 1,284 248 357 (4,521)
Extraordinary Charge, Net of Tax Benefit (1) ................. -- -- -- 2,126 --
--------- -------- -------- -------- ---------
Net Income (Loss) ............................................ 1,568 1,284 248 (1,769) (4,521)
Accretion of Redeemable Put Warrant .......................... 940 1,412 2,107 280 --
--------- -------- -------- -------- ---------
Net Income (Loss) Applicable to Common Stockholders .......... $ 628 $ (128) $ (1,859) $ (2,049) $ (4,521)
========= ======== ======== ======== =========
2
<PAGE>
Income (Loss) per Common Share (2):
Basic:
Income (Loss) Before Extraordinary Charge ................... $ 9.10 $ (0.40) $ (32.61) $ 0.00 $ (0.26)
Extraordinary Charge, Net of Tax Benefit (1) ................ -- -- -- (0.15) --
--------- -------- -------- -------- ---------
Net Income (Loss) Applicable to Common Stockholders ......... $ 9.10 $ (0.40) $ (32.61) $ (0.15) $ (0.26)
========= ======== ======== ======== =========
Weighted Average Common Shares Outstanding .................. 69 321 57 13,911 17,172
========= ======== ======== ======== =========
Diluted:
Income (Loss) Before Extraordinary Charge ................... $ 0.05 $ (0.40) $ (32.61) $ 0.00 $ (0.26)
Extraordinary Charge, Net of Tax Benefit (1) ................ -- -- -- (0.15) --
--------- -------- -------- -------- ---------
Net Income (Loss) Applicable to Common Stockholders ......... $ 0.05 $ (0.40) $ (32.61) $ (0.15) $ (0.26)
========= ======== ======== ======== =========
Weighted Average Common Shares Outstanding .................. 12,101 321 57 13,911 17,172
========= ======== ======== ======== =========
Pro Forma (3):
Net Income (Loss) Applicable to Common Stockholders ......... $ 0.05 $ (0.01) $ (0.16) $ (0.13) $ (0.26)
========= ======== ======== ======== =========
Weighted Average Common Shares Outstanding .................. 12,101 11,976 11,676 15,206 17,172
========= ======== ======== ======== =========
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------------
1993 1994 1995 1996 1997
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Other Data:
EBITDA (4) ....................................... $ 18,648 $ 20,885 $ 26,124 $ 33,629 $ 50,218
EBITDA as a Percentage of Total Revenues ......... 22.8% 23.8% 25.0% 24.2% 24.1%
Capital Expenditures: ............................
Growth (5)(6) ................................... $ 13,605 $ 15,829 $ 14,395 $ 23,334 $ 37,082
Maintenance ..................................... 1,846 1,151 858 1,112 1,238
-------- -------- -------- -------- --------
Total Capital Expenditures (6) ................ $ 15,451 $ 16,980 $ 15,253 $ 24,446 $ 38,320
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
As of December 31,
--------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and Cash Equivalents ..................... $ 591 $ 1,303 $ 1,585 $ 3,453 $ 24,510
Total Assets .................................. 125,288 136,859 186,881 281,799 636,786
Total Debt .................................... 78,460 86,258 121,874 184,733 428,018
Stockholders' Equity .......................... 24,047 22,869 21,011 52,384 137,733
</TABLE>
- ----------------------
(1) The extraordinary charge consists of a prepayment penalty, the write-off of
deferred financing costs, original issue discount and loss on termination
of interest rate protection agreements.
(2) All Share and Per Share Data reflect a three-for-two stock split effected in
the form of a dividend on the Company's Common Stock which was approved by
the Company's Board of Directors on June 30, 1998. Shares of the Common
Stock were issued on July 31, 1998 to all stockholders of record as of the
close of business on July 17, 1998.
(3) Represents pro forma earnings per share as if the preferred stock that was
converted into Common Stock in connection with the Company's Initial
Public Offering had been converted for all periods presented.
(4) Based on its experience in the records management industry, the Company
believes that earnings before interest, taxes, depreciation, amortization
and extraordinary items ("EBITDA") is an important tool for measuring the
performance of records management companies (including potential acquisition
targets) in several areas, such as liquidity, operating performance and
leverage. In addition, lenders use EBITDA as a criterion in evaluating
records management companies, and substantially all of the Company's
financing agreements contain covenants in which EBITDA is used as a measure
of financial performance. However, EBITDA should not be considered an
alternative to operating or net income (as determined in accordance with
generally accepted accounting principles ("GAAP")) as an indicator of the
Company's performance or to cash flow from operations (as determined in
accordance with GAAP) as a measure of liquidity.
4
<PAGE>
(5) Growth capital expenditures consist primarily of investments in racking
systems, management information systems, new buildings and improvements to
existing facilities.
(6) Includes $2,901 in 1994 related to the cost of constructing a records
management facility which was sold in a sale and leaseback transaction in
1994.
5
<PAGE>
Item 7. Financial Statements and Exhibits
During 1998, the Company acquired several records management businesses. The
following represents financial statements of Midwest Records Management, Sloan
Vaults, Inc. and Affiliate (dba The Vault), and Intermation, Inc. which were
acquired by the Company on January 8, 1998, February 3, 1998 and April 6, 1998,
respectively. Such financial statements have been included in this filing in
accordance with Rule 3-05 of Regulation S-X so that financial statements for a
substantial majority of businesses acquired by the Company since the date of the
most recent audited balance sheet have been furnished.
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
(a) Financial Statements of the Businesses Acquired:
Midwest Records Management:
Audited financial statements as of and for the year ended
December 31, 1997. 7-12
Sloan Vaults, Inc. and Affiliate (dba The Vault):
Audited financial statements as of and for the year ended
December 31, 1997. 13-21
Intermation, Inc.:
Audited financial statements as of and for the year ended
December 31, 1997, unaudited balance sheet as of March 31, 1998,
unaudited statement of stockholders' equity for the three months
ended March 31, 1998 and unaudited statements of operations and
cash flows for the three months ended March 31, 1998 and 1997. 22-35
</TABLE>
(b) Pro Forma Financial Information:
Since none of the acquired businesses reported in Item 7(a) are
considered to be significant under the definition of Article 11 of
Regulation S-X, pro forma financial information for such acquired
businesses has not been reported.
(c) Exhibits:
Exhibit 23.1 Consent of Arthur Andersen LLP
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying balance sheet of Midwest Records Management as
of December 31, 1997, and the related statements of operations and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Midwest Records Management as
of December 31, 1997, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
Omaha, Nebraska
February 25, 1998
7
<PAGE>
MIDWEST RECORDS MANAGEMENT
--------------------------
BALANCE SHEET--DECEMBER 31, 1997
--------------------------------
(Note 1)
--------
ASSETS
------
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash $ 79,244
Accounts receivable, less allowance for doubtful
accounts of $2,000 85,412
--------
Total current assets 164,656
PROPERTY AND EQUIPMENT:
Property and equipment 590,699
Less- Accumulated depreciation 437,493
--------
Net property and equipment 153,206
--------
Total assets $317,862
========
LIABILITIES AND RETAINED EARNINGS
---------------------------------
CURRENT LIABILITIES:
Accounts payable $ 57,014
Accrued expenses 5,659
--------
Total current liabilities 62,673
RETAINED EARNINGS 255,189
--------
Total liabilities and retained earnings $317,862
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
MIDWEST RECORDS MANAGEMENT
--------------------------
STATEMENT OF OPERATIONS
-----------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
(Note 1)
--------
<TABLE>
<S> <C>
REVENUES:
Storage $ 802,259
Service and storage materials sales 358,528
----------
Total revenues 1,160,787
OPERATING EXPENSES:
Cost of sales, excluding depreciation 465,135
Selling, general and administrative 231,309
Depreciation 57,822
----------
Total operating expenses 754,266
----------
NET INCOME 406,521
RETAINED EARNINGS:
Beginning of year 306,144
Withdrawals by Parent, net (457,476)
----------
End of year $ 255,189
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
MIDWEST RECORDS MANAGEMENT
--------------------------
STATEMENT OF CASH FLOWS
-----------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
(Note 1)
--------
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 406,521
Adjustments to reconcile net income to net cash
provided by operating activities-
Provision for doubtful accounts 2,000
Depreciation and amortization 57,822
Change in current assets and liabilities-
Accounts receivable 18,168
Accounts payable 57,014
Accrued expenses (1,806)
---------
Net cash provided by operating activities 539,719
---------
CASH FLOWS USED BY INVESTING ACTIVITIES:
Property and equipment purchases, net (41,664)
---------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Withdrawals by Parent (485,429)
---------
NET INCREASE IN CASH 12,626
CASH, beginning of year 66,618
---------
CASH, end of year $ 79,244
=========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
During 1997, the Company's Parent transferred service vehicles to the Company
with a net book value of $27,953, increasing net property and equipment and
reducing the receivable from Parent.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
MIDWEST RECORDS MANAGEMENT
--------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1997
-----------------
1. ORGANIZATION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------------------------
Midwest Records Management (the Company), an operating division of I-GO Van &
Storage Co., Omaha, Nebraska (the Parent), is a full-service records management
operation providing storage and management of business records and computer
media to customers in Omaha, Nebraska.
Property and Equipment
- ----------------------
Depreciation and amortization of property and equipment are recorded using the
straight-line and accelerated methods. Property and equipment consist of the
following:
<TABLE>
<CAPTION>
Original
Useful Lives Cost
---------------- --------
<S> <C> <C>
Warehouse equipment 5 to 7 years $310,753
Transportation equipment 5 years 77,909
Leasehold improvements 15 to 31.5 years 126,015
Office equipment 5 to 7 years 76,022
--------
Total property and equipment $590,699
========
</TABLE>
Revenue Recognition
- -------------------
Revenue is recognized under storage and service agreements in the month the
services are provided. Storage material sales are recognized when delivered to
the customer.
Income Taxes
- ------------
The Parent has elected to be treated as a Subchapter S corporation under the
Internal Revenue Code. Under these provisions, the Parent generally does not pay
federal corporate income taxes on its taxable income. Instead, the Parent's
stockholders are liable for individual federal income taxes on their respective
shares of the Parent's taxable income. Accordingly, no provision for federal
corporate income taxes has been reflected in the Company's financial statements.
Financial Instruments
- ---------------------
Unless otherwise noted, financial instruments are stated at cost, which
approximates fair value.
11
<PAGE>
Use of Estimates in the Preparation of Financial Statements
- -----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. RELATED-PARTY TRANSACTIONS:
---------------------------
Since the Company began operating as a separate division of the Parent, the
Parent has withdrawn any excess cash of the Company. The cumulative cash
withdrawn from the Company, as well as other transactions between the Company
and the Parent, are reflected as withdrawals by Parent.
During 1997, the Company paid $84,000 of rent expense to the Parent for use of
the warehouse facility and offices.
3. EMPLOYEE BENEFITS:
------------------
The Parent has employee benefit plans for eligible employees. Contributions are
determined by the Board of Directors but are limited to an amount deductible for
federal income tax purposes. The Parent reserves the right to terminate or amend
the plans at any time. During 1997, the Company recognized expenses totaling
approximately $45,000 related to those employee benefit plans.
4. SUBSEQUENT EVENT:
-----------------
On January 8, 1998, the Parent sold the Company's major operating assets, to
Iron Mountain Records Management, Inc. for an amount in excess of book value.
12
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying combined balance sheet of SLOAN VAULTS, INC.
(dba The Vault, a California S-corporation) AND AFFILIATE as of December 31,
1997 and the related combined statements of operations, stockholders' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Sloan Vaults, Inc.
and affiliate as of December 31, 1997, and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ ARTHUR ANDERSEN LLP
San Diego, California
March 13, 1998
13
<PAGE>
SLOAN VAULTS, INC. AND AFFILIATE
(dba The Vault)
COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1997
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash and cash equivalents $ 390,058
Short-term investments 127,398
Accounts receivable (less allowance of $26,000) 164,521
Inventories 19,282
Prepaid expenses and other current assets 27,989
----------
Total Current Assets 729,248
Property, Plant and Equipment:
Property, plant and equipment at cost 2,394,110
Less: accumulated depreciation (587,670)
----------
Property, Plant and Equipment, Net 1,806,440
Other Assets 2,890
----------
Total Assets $2,538,578
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 56,531
Accounts payable 25,650
Accrued expenses 80,250
Deferred revenues 250,551
Dividends payable 200,000
----------
Total Current Liabilities 612,982
Long-Term Debt, Net of Current Portion 1,250,414
Stockholders' Equity:
Common stock - no par value, 1,000,000 shares
authorized, 13,915.5 shares issued and outstanding 323,713
Retained earnings 351,469
----------
Total Stockholders' Equity 675,182
----------
Total Liabilities and Stockholders' Equity $2,538,578
==========
</TABLE>
The accompanying notes are an integral part
of these combined financial statements.
14
<PAGE>
SLOAN VAULTS, INC. AND AFFILIATE
(dba The Vault)
COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
Revenues:
Storage $1,237,857
Service and storage materials sales 805,888
----------
Total Revenues 2,043,745
----------
Operating Expenses:
Cost of sales (excluding depreciation) 94,714
Selling, general and administrative 1,015,541
Depreciation and amortization 100,353
----------
Total Operating Expenses 1,210,608
----------
Operating Income 833,137
Interest expense 110,530
----------
Income Before Provision for Income Taxes 722,607
Provision for Income Taxes 12,068
----------
Net Income $ 710,539
==========
</TABLE>
The accompanying notes are an integral part
of these combined financial statements.
15
<PAGE>
SLOAN VAULTS, INC. AND AFFILIATE
(dba The Vault)
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Common Stock Total
------------------------- Retained Stockholders'
Shares Amount Earnings Equity
-------- -------- --------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 13,073.0 $252,943 $ 381,133 $ 634,076
Stock Option Exercised 842.5 70,770 - 70,770
Dividends - - (540,203) (540,203)
Dividends Declared - - (200,000) (200,000)
Net Income - - 710,539 710,539
-------- -------- --------- ---------
Balance, December 31, 1997 13,915.5 $323,713 $ 351,469 $ 675,182
======== ======== ========= =========
</TABLE>
The accompanying notes are an integral part
of these combined financial statements.
16
<PAGE>
SLOAN VAULTS, INC. AND AFFILIATE
(dba The Vault)
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
Cash Flow From Operating Activities:
Net income $ 710,539
Adjustments to reconcile net income to cash
flows provided by operations:
Depreciation and amortization 100,353
Loss on sale of fixed assets 4,939
Changes in assets and liabilities:
Accounts receivable 16,442
Inventories 1,604
Prepaid expenses and other current assets 1,127
Accounts payable 12,903
Accrued expenses 2,192
Deferred revenues 38,581
---------
Cash Flows Provided by Operations 888,680
---------
Cash Flows From Investing Activities:
Capital expenditures (54,360)
Proceeds from sales of fixed assets 11,986
Net change in short-term investments (1,386)
---------
Cash Flows Used in Investing Activities (43,760)
---------
Cash Flows From Financing Activities:
Repayment of long-term debt (54,532)
Net proceeds from exercise of stock option 70,770
Dividends paid (632,222)
---------
Cash Flows Used in Financing Activities (615,984)
---------
Increase in Cash and Cash Equivalents 228,936
Cash and Cash Equivalents, beginning of year 161,122
---------
Cash and Cash Equivalents, end of year $ 390,058
=========
Supplemental Information:
Cash Paid for Interest $ 110,860
=========
Cash Paid for Income Taxes $ 9,200
=========
Non-Cash Financing Transaction:
Dividends Declared $ 200,000
=========
</TABLE>
The accompanying notes are an integral part
of these combined financial statements.
17
<PAGE>
SLOAN VAULTS, INC. AND AFFILIATE
(dba The Vault)
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. Nature of Business and Principles of Combination
Sloan Vaults, Inc. (dba The Vault) (the "Company") was established in 1982 as an
S-corporation. The Company is a full service records management company
providing storage and data protection services for magnetic and paper media.
The combined financial statements include the accounts of Kearny Villa Partners
("KVP"), a general partnership wholly owned by a majority of the stockholders of
the Company. KVP was established to acquire land and construct the building
currently being occupied by the Company. All significant intercompany accounts
and transactions have been eliminated. Partner capital in KVP has been included
as a component of retained earnings in the accompanying financial statements as
the net paid-in portion of such capital is not material.
2. Summary of Significant Accounting Policies
Cash and Cash Equivalents
The Company defines cash and cash equivalents to include cash on hand
and cash invested in short-term securities which have original
maturities of less than 90 days. Cash and cash equivalents are carried
at cost which approximates fair value.
Short-Term Investments
Short-term investments consist primarily of municipal bonds with
maturities existing through August 2003. At December 31, 1997, the fair
value of short-term investments, classified as "available for sale
securities," approximated cost. Thus no unrealized holding gains or
losses were reported in the accompanying balance sheet. The Company did
not have any sales of securities and as such, did not recognize any
realized gain or loss in the accompanying statement of income.
Inventories
Inventories are carried at the lower of cost using first-in, first-out
basis or market and are comprised primarily of containers.
Property, Plant and Equipment
Property, plant and equipment are stated at cost and depreciated using
the straight-line method with the following useful lives:
<TABLE>
<S> <C>
Land improvements 15 years
Building 39 years
Warehouse equipment/vehicles 5 to 7 years
Furniture and fixtures 7 years
</TABLE>
18
<PAGE>
Property, plant and equipment consist of the following:
<TABLE>
<S> <C>
Land $ 571,504
Land improvements 61,069
Building 1,148,198
Warehouse equipment/vehicles 510,222
Furniture and fixtures 103,117
-----------
$ 2,394,110
===========
</TABLE>
Minor maintenance costs are expensed as incurred. Major improvements to
the building are capitalized and depreciated as described above.
Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. If the sum of future undiscounted cash
flows expected to result from the use of the asset and its eventual
disposition is less than the carrying amount of the asset, an
impairment loss is recognized.
Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped
to the customer. Amounts related to future storage for customers where
storage fees are billed in advance are accounted for as deferred
revenues and recognized over the applicable period.
Accrued Expenses
Accrued expenses consist of the following:
<TABLE>
<S> <C>
Payroll and related $ 49,651
Other 30,599
--------
$ 80,250
========
</TABLE>
Income Taxes
The Company has elected to be treated as an S Corporation for federal
and state income tax purposes. In accordance with federal provisions,
corporate earnings flow through and are taxed solely at the stockholder
level. Under the provisions of California franchise tax law, S
Corporation earnings are assessed a 1.5 percent surtax at the corporate
level and corporate earnings also flow through to the stockholders to
be taxed at the individual stockholder level. The earnings of KVP, a
general partnership, flow through and are taxed solely at the partner
level.
19
<PAGE>
Stock-Based Compensation Accounting
The Company accounts for stock-based compensation in accordance with
Statement of Financial Accounting Standards (SFAS) No. 123 "Accounting
for Stock-Based Compensation." The Company has elected to measure
compensation expense for its stock-based employee compensation plans
using the intrinsic value method prescribed by Accounting Principles
Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees"
and to provide pro forma disclosures as if the fair value based method
prescribed by SFAS No. 123 had been utilized. There were no proforma
adjustments to net income as reported for fiscal 1997 in accordance
with SFAS No. 123. There were no stock options outstanding at December
31, 1997.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Recent Accounting Pronouncement
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income." SFAS No. 130 establishes
standards for reporting of comprehensive income and its components in a
full set of general-purpose financial statements and is required to be
adopted by the Company beginning January 1, 1998. Adoption of this
standard is not expected to have a material impact on the Company's
financial position or results of operations.
3. Long-Term Debt
<TABLE>
<S> <C>
Note payable to bank, bearing interest at 8 percent,
monthly principal and interest payments of $7,132 with
balance due January 2003, secured by first trust deed on
land, building and improvements. $ 745,528
Note payable to financing institution, bearing interest at
7.5 percent, monthly principal and interest payments of
$5,147 with balance due December 2012, secured by second
trust deed on land, building and improvements. 552,955
Note payable to bank, bearing interest at 7.75 percent,
paid January 1998. 8,462
----------
1,306,945
Less current maturities (56,531)
----------
$1,250,414
==========
</TABLE>
20
<PAGE>
Maturities of long-term debt are as follows:
<TABLE>
Year Ending December 31,
------------------------
<S> <C>
1998 $ 56,531
1999 51,953
2000 56,149
2001 60,684
2002 65,587
Thereafter 1,016,041
----------
$1,306,945
==========
</TABLE>
4. Stockholder's Equity
Stock Option
In January 1990, the Company entered into an agreement with a key
executive and stockholder, whereby the Company granted a nonqualified
stock option to purchase 842.5 shares at $84 per share, vesting over a
five-year period. In August 1997, this option was exercised.
Dividends
The Company's policy is to pay a dividend to stockholders relating to
each quarter in each fiscal year, as determined by the board of
directors. Dividends payable of $200,000 relating to the fourth quarter
of 1997 were paid in January 1998.
5. Retirement Plan
The Company has a defined contribution plan which covers substantially all
employees, subject to certain service requirements. Eligible employees may elect
to defer from 1 to 10% of compensation per pay period up to the amount allowed
by the Internal Revenue Code. Company contributions to the plan are determined
at the discretion of the board of directors. Company contributions for the year
ending December 31, 1997 totaled approximately $23,000 and are included in
accrued expenses.
6. Subsequent Events
On February 3, 1998, the Company sold substantially all of its assets (excluding
land, building and improvements with a net book value of approximately
$1,617,000 at December 31, 1997) and certain liabilities, to Iron Mountain
Records Management, Inc.
21
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying balance sheet of Intermation, Inc. as of
December 31, 1997, and the related statements of operations, stockholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Intermation, Inc. as of
December 31, 1997 and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
Seattle, Washington
August 21, 1998
22
<PAGE>
INTERMATION, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 77,459 $ 103,919
Accounts receivable, net of allowance of $605,123 at December 31, 1997 1,166,303 1,072,004
Inventories 14,149 24,806
Prepaid expenses and other 14,323 8,184
----------- -----------
Total Current Assets 1,272,234 1,208,913
PROPERTY, PLANT AND EQUIPMENT, net 2,529,455 2,501,783
INTANGIBLE ASSETS, net of accumulated amortization of $754,078 at December 31, 1997 877,980 1,001,461
OTHER ASSETS, net 83,175 91,911
----------- -----------
Total Assets $ 4,762,844 $ 4,804,068
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital lease obligations $ 256,093 $ 256,093
Current portion of long-term debt 363,296 363,296
Accounts payable 294,483 474,137
Accrued expenses 442,526 738,583
Deferred income 576,317 578,097
----------- -----------
Total current liabilities 1,932,715 2,410,206
LONG-TERM LEASE OBLIGATION, net of current portion 710,948 663,622
LONG-TERM DEBT, net of current portion 1,685,481 1,523,296
COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share -
Authorized, 20,000,000 shares;
issued and outstanding, 10,534,063 shares 105,341 105,341
Additional paid-in capital 7,574,995 7,574,995
Accumulated deficit (7,246,636) (7,473,392)
----------- -----------
Total Stockholders' Equity 433,700 206,944
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,762,844 $ 4,804,068
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
INTERMATION, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
Year Ended March 31,
December 31, ------------------------------
1997 1997 1998
------------ ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C>
REVENUES:
Storage $5,930,419 $1,380,455 $1,600,370
Service and storage material sales 1,317,666 291,668 390,772
---------- ---------- ----------
Total revenue 7,248,085 1,672,123 1,991,142
OPERATING EXPENSES:
Cost of sales (excluding depreciation) 3,509,804 858,027 940,690
Selling, general and administrative 2,244,984 512,431 1,055,978
Depreciation and amortization 562,051 101,825 163,906
---------- ---------- ----------
Total operating expenses 6,316,839 1,472,283 2,160,574
---------- ---------- ----------
Operating income (loss) 931,246 199,840 (169,432)
INTEREST EXPENSE (316,840) (82,317) (57,324)
---------- ---------- ----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 614,406 117,523 (226,756)
PROVISION FOR INCOME TAXES 10,000 - -
---------- ---------- ----------
NET INCOME (LOSS) $ 604,406 $ 117,523 $ (226,756)
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
INTERMATION, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE
THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Common Stock
------------------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
---------- -------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1997 10,629,667 $106,297 $7,700,648 $(7,851,042) $ (44,097)
Redemption of common stock (95,604) (956) (125,653) - (126,609)
Net income - - - 604,406 604,406
---------- -------- ---------- ----------- ---------
BALANCE, December 31, 1997 10,534,063 105,341 7,574,995 (7,246,636) 433,700
Net loss (unaudited) - - - (226,756) (226,756)
---------- -------- ---------- ----------- ---------
BALANCE, March 31, 1998 (unaudited) 10,534,063 $105,341 $7,574,995 $(7,473,392) $ 206,944
========== ======== ========== =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
INTERMATION, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
Year Ended March 31,
December 31, ------------------------------
1997 1997 1998
------------ ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 604,406 $ 117,523 $(226,756)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities-
Depreciation and amortization 562,051 101,825 163,906
Changes in assets and liabilities:
Accounts receivable, net (214,697) (26,966) 94,299
Inventory (13,521) (13,665) (10,657)
Other assets (205,028) (102,717) (158,896)
Accounts payable 154,210 20,722 179,654
Accrued liabilities 11,768 (140,355) 296,057
Deferred income 86,266 48,747 1,780
--------- --------- ---------
Net cash provided by operating activities 985,455 5,114 339,387
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (399,798) (28,947) (103,416)
Proceeds from sale of equipment 28,992 - -
--------- --------- ---------
Net cash used in investing activities (370,806) (28,947) (103,416)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 60,000 - -
Payments on long-term debt and capital lease obligations (666,575) (68,199) (209,511)
Repurchase of common stock (126,609) - -
--------- --------- ---------
Net cash used in financing activities (733,184) (68,199) (209,511)
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (118,535) (92,032) 26,460
CASH AND CASH EQUIVALENTS, beginning of period 195,994 195,994 77,459
--------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 77,459 $ 103,962 $ 103,919
========= ========= =========
CASH PAID FOR INTEREST $ 278,392 $ 53,600 $ 57,324
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
During 1997, the Company acquired equipment under capital lease
obligations totaling approximately $627,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
INTERMATION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. NATURE OF BUSINESS:
The accompanying financial statements represent the accounts of Intermation,
Inc. (Intermation or the Company), a Washington corporation. The Company is a
full service records management company providing storage and related services
in various locations throughout the Seattle, Washington and Portland, Oregon
markets. The customer base is comprised mainly of medium to large commercial,
legal, banking, healthcare, accounting, insurance, entertainment and government
organizations.
2. SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Unaudited Financial Information
The unaudited financial information included herein has been prepared in
accordance with generally accepted accounting principles. In the opinion of
management the unaudited financial statements include all adjustments of a
normal and recurring nature which are necessary for a fair presentation. The
results of operations of the three month periods ended March 31 are not
necessarily indicative of the results for the full year.
Revenue Recognition
Storage and service revenues are recognized in the month the respective service
is provided. Storage material sales are recognized when shipped to the customer.
Amounts related to future storage for customers where storage fees are billed in
advance are accounted for as deferred income and amortized over the applicable
period.
Cash and Cash Equivalents
The Company defines cash and cash equivalents to include cash on hand and cash
invested in short-term securities which have an original maturity of less than
90 days. Cash and cash equivalents are carried at cost which approximates fair
market value.
27
<PAGE>
Inventories
Inventories are carried at the lower of cost using the first-in, first-out basis
or market and are comprised primarily of cartons.
28
<PAGE>
Income Taxes
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
109. Accounting for Income Taxes. Under SFAS No. 109, deferred tax assets,
including net operating losses, and liabilities are determined based on
temporary differences between the book and tax bases of assets and liabilities.
Property, Plant and Equipment
Property, plant and equipment including assets under capital lease are stated at
cost and depreciated using the straight-line method over estimated useful lives,
as follows:
<TABLE>
<CAPTION>
<S> <C>
Hardware 5 years
Furniture, fixtures and equipment 5 - 7 years
Shelving 7 - 15 years
Vans and trucks 3 - 5 years
Leasehold improvements Remaining life of lease or life
of asset, whichever is shorter
Software 3 years
</TABLE>
Property, plant and equipment consists of the following at December 31, 1997:
<TABLE>
<CAPTION>
<S> <C>
Hardware $ 1,257,266
Furniture and fixtures 3,183,440
Vans and trucks 199,370
Leasehold improvements 335,277
Software 216,728
-----------
5,192,081
Accumulated depreciation (2,662,626)
-----------
$ 2,529,455
===========
</TABLE>
Intangible Assets
Intangible assets include goodwill, representing the excess cost over the fair
value of assets acquired in business combinations, which is amortized on a
straight-line basis over its estimated useful life of 25 years. Goodwill of
$858,815, net of accumulated amortization of $189,306 is included in intangible
assets at December 31, 1997. Other identified intangibles are amortized on a
straight-line basis over their estimated useful lives of up to five years. The
carrying value of goodwill and other intangible assets is reviewed on a regular
basis for the existence of facts or circumstances both internally and externally
that may suggest impairment.
Intangible assets also includes costs related to the initial transfer of records
related to the acquisition of large volume accounts. These costs are capitalized
as intangibles and amortized for an appropriate period not exceeding 12 years
unless the customer terminates its relationship with the Company, at which time
the unamortized cost is charged to expense.
29
<PAGE>
Accrued expenses
Accrued expenses at December 31, 1997 includes $145,570 of accrued interest on
debt obligations.
30
<PAGE>
3. LINE OF CREDIT:
The Company had a $300,000 Line of Credit with a bank that bore interest at
prime plus 1.5% (10% at December 31, 1997). The line of credit expired on May
31, 1998. The line was guaranteed by the former Chairman of the Company. No
amounts were outstanding at December 31, 1997. Under the terms of the line, the
Company was required to maintain certain financial covenants. The Company was
not in compliance with those requirements.
4. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS:
Long-term debt at December 31, 1997 consists of the following:
<TABLE>
<CAPTION>
<S> <C>
Various stockholder loans, interest at 10%, due December 2000 through March 2001.
Balance paid in full in April 1998. $1,047,362
Notes payable to Shurgard Storage Centers, Inc. (Shurgard). Interest at 10%,
principal and interest payments due monthly through March 2008.
Balance paid in full in April 1998. 292,580
Key Bank equipment loans, principal payments of $12,500 plus interest due
monthly until maturity on May 1, 2000, interest at prime plus 1.75% (10.25%
at December 31, 1997); collateralized by certain equipment of the Company
and guaranteed by the former Chairman of the Company. Balance paid in full
in April 1998. 350,000
AEA Bank term loan, interest at 10% payable monthly until maturity in January
2000, collateralized by certain equipment of the Company and guaranteed by
the Chairman of the Company. Balance paid in full in April 1998. 81,717
Miscellaneous equipment loans, collateralized by certain equipment of the
Company, with maturities from August 1998 to January 2002, interest at 7.4%
to 15.0% per annum. 253,046
Note payable, interest at 10.0%, principal and interest payments of $710 monthly
through April 2001. 24,072
----------
2,048,777
Less current portion (363,296)
----------
$1,685,481
==========
</TABLE>
This scheduled repayment of long-term debt as of December 31, 1997 is as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 363,296
1999 296,567
2000 776,225
2001 541,866
Thereafter 70,823
----------
$2,048,777
==========
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
The Company leases certain operating equipment classified as a capital lease
obligations at December 31, 1997 as follows:
Equipment leases, five-year financing leases collateralized by certain equipment
and guaranteed by the former Chairman of the Company; lease terms expiring
November 2001 through September 2002 $967,041
Less current portion (256,093)
--------
$710,948
========
</TABLE>
Total lease payments under capital lease obligations at December 31, 1997 are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 279,654
1999 279,654
2000 279,654
2001 269,436
2002 93,884
----------
1,202,282
Less amount representing interest (235,241)
----------
$ 967,041
==========
</TABLE>
Substantially all of the long-term debt and capital lease obligations are
secured by fixed assets.
5. INCOME TAXES:
At December 31, 1997, the Company had approximately $1,400,000 of federal net
operating loss carryforwards that expire in 2010 and 2011. These net operating
loss carryforwards are available to reduce future taxable income and are subject
to review and possible adjustment by the Internal Revenue Service. The Internal
Revenue Code contains provisions that may limit the net operating loss
carryforwards available in any given year in the event of significant changes in
ownership interest.
The Company has recorded a 100% valuation allowance against the deferred tax
asset related to the net operating loss carryforwards, as the realization of the
asset is uncertain. The components of the deferred tax asset at December 31,
1997, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Tax effect of net operating loss carryfowards $ 483,000
---------
Tax effect of temporary differences:
Nondeductible accruals and deferrals 249,000
Depreciation (207,000)
---------
42,000
---------
525,000
Valuation allowance (525,000)
---------
Deferred tax asset $ -
=========
</TABLE>
32
<PAGE>
A reconciliation of total income tax expense for the year ended December 31,
1997 and the amount computed by applying the U.S. federal income tax rate of 34%
to income before incoming taxes is as follows:
<TABLE>
<CAPTION>
<S> <C>
Computed "expected" tax provision $ 208,898
Increase (decrease) in income taxes resulting from-
Utilization of net operating loss carryforwards (155,408)
Change in valuation allowance (70,532)
Other 17,042
Effect of state income taxes, net 10,000
---------
Provision for income taxes $ 10,000
=========
</TABLE>
6. COMMITMENTS:
The Company leases its operating facilities under operating leases. The leases
expire through 2007. Future minimum rental payments as of December 31, 1997
required under these leases are as follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 1,250,554
1999 1,138,017
2000 957,288
2001 957,288
Thereafter 3,062,331
-----------
$7,365,478
===========
</TABLE>
Rent expense for 1997 totaled $1,814,306.
The Company also leases certain equipment under capital lease obligation (see
Note 4). The leased assets are depreciated over their estimated useful lives in
accordance with the Company's depreciation policies.
7. RELATED PARTY TRANSACTIONS:
One of the Company's significant shareholders is Chairman of the Board, CEO, and
a significant shareholder of Shurgard. At December 31, 1997, the Company owed
Shurgard approximately $293,000, as discussed in Note 4.
The Company leases one of its storage facilities from Shurgard. Aggregate rental
expense for this facility was approximately $254,000. The lease was terminated
in March 1998.
8. EMPLOYEE BENEFIT PLAN:
The Company sponsors a 401(k) plan in which all permanent full time employees
are eligible to participate after the mandatory waiting period. The Company's
contribution to the plan is 25% of the first $1,500 contributed by the employee
for a total Company contribution of $375 on a per employee basis. Total
contributions made by the Company to the plan were $12,500 for the year ended
December 31, 1997.
9. MERGER WITH PROFESSIONAL RECORDS CENTER:
Effective January 1, 1997, the Company merged with Professional Records Center,
Inc.
33
<PAGE>
(PRC), an Oregon Corporation. In connection with the merger, 3,293,136
shares of common stock were issued to the shareholders of PRC in exchange for
all of the outstanding shares of PRC. The business combination was accounted for
as a pooling-of-interests.
34
<PAGE>
10. STOCK OPTION PLAN AND WARRANTS:
During 1997, Intermation's Board of Directors approved a stock option plan which
provides for the purchase of Intermation common stock at a stipulated price.
Under the Plan, 750,000 shares of Intermation common stock have been reserved
for option grants. During 1997, the Company granted options to purchase 250,000
shares of common stock at $.66 per share, the estimated fair value at grant
date, all of which were outstanding at year-end. The options vest ratably over 5
years.
The Company follows APB Opinion 25 and related Interpretations in accounting for
stock options. Accordingly, no compensation cost has been recognized. Had
compensation cost for the options granted in 1997 been determined in accordance
with Financial Accounting Standard 123, "Accounting for Stock-Based
Compensation," net income would have been reduced to the amounts indicated
below.
<TABLE>
<CAPTION>
1997
--------
<S> <C>
Net income - as reported $604,406
Net income - pro forma 585,281
</TABLE>
The fair value of options granted in 1997 was $.51 per share. The values were
estimated on the date of grant using the Black-Scholes option pricing model. The
following table summarizes the weighted average assumptions used for grants in
the year ended December 31:
<TABLE>
<CAPTION>
Assumptions 1997
----------- -------
<S> <C>
Expected volatility -
Risk-free interest rate 6.0%
Expected dividend yield -
Expected life of the option 5 years
</TABLE>
In connection with the loans made to the Company by certain stockholders, in
December 1995 and early 1996, the Company issued 262,800 warrants to purchase
its common stock. The warrants give the holders the right to purchase common
stock at $0.52 per share for ten years from the date of issuance.
11. SUBSEQUENT EVENT:
In April 1998, all of the outstanding shares of the Company were acquired by
Iron Mountain Incorporated for a combination of cash and Iron Mountain
Incorporated common stock.
35
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IRON MOUNTAIN INCORPORATED
(Registrant)
September 18, 1998 By: /s/ Jean A. Bua
- ------------------ ------------------------
(date) Jean A. Bua
Vice President and Corporate Controller
(Principal Accounting Officer)
36
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of our
reports dated March 13, 1998, February 25, 1998 and August 21, 1998 for Sloan
Vaults, Inc. and Affiliate, Midwest Records Management and Intermation, Inc.,
respectively, included in this Form 8-K, into Iron Mountain Inc.'s previously
filed registration statements on Forms S-3 (File No. 333-44185), S-4 (File No.
333-44187) and S-8 (File Nos. 333-24803, 333-33191, 333-43901, 333-60919 and
333-60921).
/s/ ARTHUR ANDERSEN LLP
San Diego, California
Omaha, Nebraska
Seattle, Washington
September 14, 1998
